Loop Commerce gets $8M to make you a better gift giver

SaaS gifting solution takes the hassle out of gift giving by turning it into a collaborative process

We with the holidays just around the corner, it is also time for us to start thinking about the gifts we need to buy for all of our friends and family. I got a bit of an early start this year, but I still have a ton of shopping I need to do.

Of course, giving gifts can also present a problem: getting people the right thing. So often I have turned to gift cards in the past because it was just so much easier than trying to guess what someone wanted. But that always feels so impersonal and, frankly, a little lazy, asif you could not be bothered to think of something better.

Loop Commerce, a SaaS gifting solution, wants to change all that. The company makes gift giving a collaborative experience, and has now raised more than $7 million in Series A funding, it was announced Wednesday.

The money came from a group of investors in the payments and giftcards industry including Mark Carges, CTO of eBay; Don Katz, Founder and CEO at Audible and EVP at Amazon; Chuck Geiger, CTO at Chegg and former CTO at PayPal; Roy Rubin, Founder of Magento; Michael Scharff, previously SVP Retail at Toys “R” Us; Novel TMT, which is backed by the owner of the likes of Tommy Hilfiger and Michael Kors; and Oren Zeev.

Loop Commerce previously raised seed funding of $1 from Zeev, and this latest rounds put the company over $8 million in total funding.

The new money will be used to continue to support the development of the platform, as well as focus on sales and marketing, Loop Commerce CEO and co-founder Roy Erez told me in an interview. The company will also be hiring some new engineers.

Founded a year ago, the Mountain View, California-based Loop Commerce seeks to solve the problems that come with buying someone a gift by putting part of the transaction into the hands of the gift recipient.

Here's how it works: let's say that a person wants to buy a shirt for himself or herself. They would go onto a site, pick a color, my size and then buy it. But if they want to buy that same shirt for someone else, that is where the issues begin. First, they don't know what color the person would like. They also probably don't know their size. And they might not even have their address.

So what Loop Commerce does is put layer over any e-commerce website, which allows the user to simply pick an item, give an e-mail address, and pay.

What then happens is that the recipient will get an e-mail saying that they got the gift; they then get to pick the color and the size of the shirt, and say where to ship it. It makes the person who receives the gift part of the experience, and puts part of the transaction into their hands.

The person receiving the gift is given option of exchanging the item if they do not like it, and, since they can do this before the item is ever shipped, it saves the store on the cost of returns and processing, Erez told me.

"Every product becomes giftable," said Erez, "be it shoes, glasses, cosmetics, anything."

The idea for Loop Commerce came from the realization that shopping online was not optimized for buying for someone else, Erez told me. And that had to giftcards "becoming the flavor of the decade" simply due to their convenience.

But people want to give each other real gifts, and ones that show that they actually put some effort into it.

"People want to give a thoughtful, meaningful gift," he said. "And not one with a price tag associated with it, like a gift card or cash."

What Loop Commerce ultimately does, Erez said, is combine the best of both worlds. It gives "the benefits and flexibility of a gift card, with the thoughtfulness of a real gift."

The company is currently in private beta, but has signed multiple partners, both smaller and larger merchants, some of who became investors in the company. They are based both in the United States and internationally. 

Erez told me that was especially proud of getting funding from people within the e-commerce industry, rather than venture capitalists.

This, he said, will help Loop significantly. He desires to give these merchants a simple way to integrate the solution, and getting the acceptance from the industry will help Loop continue to grow so that it can "change the shopping experience for gifting."